Correlation Between Global Gold and Allianzgi Emerging
Can any of the company-specific risk be diversified away by investing in both Global Gold and Allianzgi Emerging at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Global Gold and Allianzgi Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Allianzgi Emerging Markets, you can compare the effects of market volatilities on Global Gold and Allianzgi Emerging and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Global Gold with a short position of Allianzgi Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Allianzgi Emerging.
Diversification Opportunities for Global Gold and Allianzgi Emerging
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Global and Allianzgi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Allianzgi Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Emerging and Global Gold is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Global Gold Fund are associated (or correlated) with Allianzgi Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Emerging has no effect on the direction of Global Gold i.e., Global Gold and Allianzgi Emerging go up and down completely randomly.
Pair Corralation between Global Gold and Allianzgi Emerging
Assuming the 90 days horizon Global Gold Fund is expected to generate 2.67 times more return on investment than Allianzgi Emerging. However, Global Gold is 2.67 times more volatile than Allianzgi Emerging Markets. It trades about 0.08 of its potential returns per unit of risk. Allianzgi Emerging Markets is currently generating about -0.04 per unit of risk. If you would invest 1,265 in Global Gold Fund on September 12, 2024 and sell it today you would earn a total of 32.00 from holding Global Gold Fund or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Allianzgi Emerging Markets
Performance |
| Timeline |
| Global Gold Fund |
| Allianzgi Emerging |
Global Gold and Allianzgi Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Allianzgi Emerging
The main advantage of trading using opposite Global Gold and Allianzgi Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Allianzgi Emerging can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Allianzgi Emerging will offset losses from the drop in Allianzgi Emerging's long position.| Global Gold vs. Technology Ultrasector Profund | Global Gold vs. Towpath Technology | Global Gold vs. Columbia Global Technology | Global Gold vs. Goldman Sachs Technology |
| Allianzgi Emerging vs. Schwab Government Money | Allianzgi Emerging vs. Payden Government Fund | Allianzgi Emerging vs. Prudential Government Income | Allianzgi Emerging vs. Long Term Government Fund |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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